2018/08/01(Sender: FC Owners Operations Office)
The dream of independent business ownership.
If you have signed a franchise agreement, you may be preparing for the opening of your first store, feeling excited and anxious at the same time.
However, during the preparation period for opening,
not a single yen will come in,
and money will only go out, such as startup capital and living expenses until opening.
You must not forget that during the period before opening, you will be constantly "drawing down your funds."
If you are currently preparing to open a business and have not yet quit your job, we recommend that you make a detailed plan of the "opening schedule" and "startup capital required before opening" for your franchise store before quitting your job.
Then, make a detailed plan of "what needs to be done before opening" and "when and how much cash will be spent" to ensure that you do not run out of funds before opening.
Among the various franchise business types, the following three types require a particularly long time before opening.
~Business types that require time to open~
Furthermore, if it's a franchise business type that requires 'recruiting personnel' and 'finding a property,' then if 'personnel and property cannot be found as expected,' the opening date will be delayed accordingly.
As the saying goes, 'Haste makes waste,' and many people want to take their time to select the right personnel and decide on a property.
However, in business, it's not that simple.
"A delayed opening means a delayed cash inflow"
Remember this.
The period of 'money only going out' will be longer, and your funds will continue to dwindle.
Before signing the franchise agreement, you have undoubtedly calculated 'major items' such as 'property acquisition costs' and 'existing property/interior construction costs'. However, even for these, the necessary funds vary greatly depending on the situation.
For example, regarding "property acquisition costs,"
The security deposit (guarantee deposit) varies greatly depending on the location of the property and the landlord, ranging from 3 to 10 months' rent.
Key money and real estate brokerage fees also vary depending on the property, ranging from 0 to 2 months' rent.
At a minimum, it can be as little as 3 months' rent, but at a maximum, it can be as much as 14 months' rent.
If the rent is 300,000 yen, the funds required to acquire the property will vary significantly, from 900,000 yen to 4,200,000 yen.
Next, regarding "existing property and interior construction costs,"
If you can use the existing property completely as is, you won't need to pay additional interior construction costs.
However, a certain amount of interior work is usually required, and the interior construction costs also vary greatly depending on the existing property being acquired.
Especially in the case of franchises, it is necessary to maintain a 'uniform brand image across all stores'. Therefore, instead of simply using the existing premises as they are, interior renovations may be necessary to match the franchise's image.
If significant interior renovations are needed from an existing premises, the interior renovation costs will increase accordingly.
In addition to the large items that you would have originally anticipated, as mentioned above, various expenses can accumulate from small items that you hadn't anticipated. Let's create a detailed schedule outlining what needs to be done for each step, and when and how much will be needed for each step.
For example, some of the detailed items include:
These are some examples. Even though each individual expense may be small, they can add up to hundreds of thousands or even over a million yen.
The cost of recruiting part-time workers is fine if you can gather the necessary number of people in one recruitment attempt, but in today's labor shortage, you may have to keep recruiting repeatedly.
Furthermore, expenses for interviews, transportation, and accommodation, which I could claim from my company when I was a salaried employee, I now have to pay for all of them myself as a franchise owner.
On top of that, there are expenses such as rent while the property is being renovated and the interior is being completed, and pre-opening personnel costs while hiring and training staff before opening. During this period until opening, there is no income at all, and living expenses must be covered entirely by drawing on funds.
If you are worried about startup costs such as operating expenses and living expenses, a franchise where you can start while working as an employee is a good option.
Recently, there have been many plans that allow you to work at a franchise headquarters' directly managed store for 3 to 6 months, learn the headquarters' know-how, and then become an independent franchise owner.
In today's era of labor shortages, franchise headquarters are also short of staff.
For 3 to 6 months, you can secure personnel for a directly managed store of the franchise headquarters, and they will also become franchise owners afterward, increasing the number of stores and providing significant benefits to the franchise headquarters.
Furthermore, for the franchise owners who join, they can learn know-how while receiving payment, and also prepare for opening.
There is a big difference between preparing for opening by drawing on your own funds and preparing for opening while receiving payment.
Considering a franchise headquarters that offers such a plan is one option.
As described above, the opening schedule and opening funds are greatly influenced by various factors.
First, clarify each and every step of what needs to be done before opening your business, as outlined above, and create a detailed opening schedule, outlining "when and how much money will be needed."
Then, apply "how much personal capital you have," "how much you can borrow, and when you plan to receive the funds." Then, check whether operating expenses and living expenses are sufficient until opening, and for about six months after opening.
The reason I recommend leaving your company only after you have planned a detailed opening schedule and necessary funds is for the reasons stated above.
In any case, constantly decreasing assets is not good for your mental health.
There are things you can do while continuing to work as an employee, such as searching for properties on weekends.
As long as you can do these things, I strongly recommend not leaving your company, and instead resigning when the path to opening your business becomes clearer.
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